Kotaku has word that the courts are allowing Silicon Knights' legal action to proceed against Epic over Unreal engine licensing. Here's word:

In short, Silicon Knights said it didn't get what it was promised by Epic and it wants a cut of those Gears of War profits as compensation.

Silicon Knights calls a recent ruling in its case a "victory in their litigation against Epic." That's because a federal court has agreed with Silicon Knights that it can go before a jury with its allegations of fraud, negligent misrepresentation, unfair competition, breach of contract, and breach of warranty against the Unreal Engine maker.

The Too Human developer may also have an ally in Disney, which Silicon Knights says had "almost identical claims" against Epic in 2006.